Investing.com - Energy stocks struggled in midday trading, with Apache (NYSE:APA) a notable loser after it announced it would put its West Texas pipeline assets into a joint venture.
The S&P 500 Energy Sector index fell about 0.7% at 11:50 AM ET (15:55 GMT).
Apache Corporation (NYSE:APA), the weakest component in the index, fell about 8%.
Apache will give about $1 billion in assets to Kayne Anderson Acquisition for the deal.
Occidental Petroleum (NYSE:OXY), Hess (NYSE:HES) and Newfield Exploration (NYSE:NFX) were also down midday.
Energy stocks slumped despite the fact the crude oil was little changed as traders digested a smaller-than-expected drop in U.S. crude inventories and the prospect of less Iranian crude on the market.
The first round of U.S. sanctions against Iran went into effect on Tuesday, while a second round is expected in early November. The second set of sanctions are expected to hit the countries energy infrastructure and oil exports, increasing the potential of a global energy supply shortage.
Many countries, including Europe, China and Russia, oppose the sanctions, but the White House wants other countries to stop buying oil from Iran.
Oil prices have been driven higher in the past few months as demand for oil outstrips supply, but trade tensions have weighed on markets. China is imposing a 25% tariff on $16 billion of U.S. imports in response to a U.S. tariff of the same amount on Chinese goods. As the two largest economies in the world go head-to-head over trade policies, investors worry about its potential impact on commodities and the global economy.